Study: Large part of state economy tied to health care

A study by the Missouri Hospital Association shows the business of providing health care continues to grow while other businesses struggle.

About one-eighth of the state's economy is tied to its hospitals, according to the study prepared by the Community Policy Analysis Center at the University of Missouri-Columbia.

In 2009 in Southeast Missouri, hospitals employed 8,500 people paying total payroll and benefits of $350.5 million, the study showed.

The study's Southeast Missouri region included 15 hospitals in Bollinger, Cape Girardeau, Dunklin, Iron, Madison, Mississippi, New Madrid, Pemiscot, Perry, Scott, St. Francois, Ste. Genevieve and Stoddard counties. Those 15 hospitals had net revenue of $1.1 billion.

Saint Francis Medical Center and SoutheastHEALTH in Cape Girardeau are Cape Girardeau County's largest employers, with more than 4,750 employees combined.

Saint Francis, with 2,460 employees, spent 39 percent of its fiscal year 2010 revenue on employee wages and benefits, according to Steven Bjelich, president and chief executive officer.

Southeast Hospital, with 2,294 employees, spent 44.9 percent of its 2009 revenue on employee wages and benefits, according to the hospital's 2009-2010 annual report.

Of Missouri's top five private-sector job fields, the health care sector is the only one that has continued to add jobs during the economic downturn, said Herb Kuhn, president and CEO of the Missouri Hospital Association.

The health care sector has added 31,500 jobs in Missouri since October 2006. Hospital employment grew by nearly 24 percent from 2002 to 2009, adding 23,000 full-time jobs in Missouri, the survey showed.

During this same period, Missouri's total nonfarm employment decreased by 151,220 jobs.

'A great foundation'

"During this time of economic recession, we've been a stabilizing force out there and have a great foundation to build on as we continue to move forward," Kuhn said.

Hospitals also created 1,875 indirect jobs in Southeast Missouri and indirectly added $118.2 million to the region's economy, the study revealed.

Missouri's health care growth is consistent with national trends. During the last 12 months, health care has added 260,000 jobs, according to the U.S. Bureau of Labor Statistics.

In Missouri, the health care sector provided 10 percent of the state's total jobs in 2008, a number higher than the national average.

Last year, the health care sector took the lead in employing the most Missourians, with 147,165 workers. That's more employees than retail trade, construction, accommodation and food service and manufacturing, the study showed.

The average weekly wage rate in the state's hospitals is higher than the averages of all private-sector employment in Missouri, the study found. Average hospital wages were $900 per week in 2009.

Although the study didn't include specific figures for Southeast Missouri, hospital construction statewide created 2,130 jobs in 2009 with a direct economic effect of $59.6 million and an indirect effect of $15.1 million.

Expansions

Saint Francis has more than $120 million in construction in progress or recently completed on its campus, including the Heart Hospital and Cancer Institute, Gene E. Huckstep Emergency and Trauma Center expansion, Womancare Breast Center expansion, Center for Digestive Diseases construction and Family Birthplace expansion.

Southeast opened its $33 million Regional Cancer Center in February at its west campus, where its Southeast Regional Medical Complex is.

Construction at Saint Francis has had more than 360 full-time employees from various contractors working on its new Heart Hospital and Cancer Institute. More than 45 Saint Francis staff are completing the inside of the new building now.

The number of construction jobs created by Southeast's cancer center wasn't provided by hospital administrators.

The Missouri Hospital Association's study also looked at the effect of "medical tourism" on Southeast Missouri.

"Southeast Missouri's hospitals provide outstanding medical care that attracts patients from neighboring sates," the study said. "These 'medical tourists' not only spend money on their medical care, but they also purchase other goods and services while away from their homes."

Medical tourism in Southeast Missouri created 119 jobs, including 86 food and beverage service jobs, 31 hotel jobs, and two service station jobs, the study showed. Medical tourism had a direct economic impact of $2.2 million and an indirect impact of $586,757. It resulted in a $2.2 million impact to food and beverages businesses, $1.1 million impact to hotels, $86,343 million to service stations.

This study is particularly timely as hospitals gear up to serve the estimated 32 million Americans, including 400,000 Missourians who will soon have new access to health insurance under federal health care reforms known as the Affordable Care Act.

"As we look at issues related to health care reform, we will continue to employ increasing numbers as increasing numbers have access to health care," said Mary Becker, senior vice president at the Missouri Hospital Association.

A majority of financing for federal health care reforms will come out of funds the government currently spends on the elderly and uninsured.

"It's a way of trying to make sure that when we look at financing of health care in the future and cutting the public programs that make up a portion of our revenue, it's important to realize we aren't cutting off a source of jobs for our state," Becker said of the study. "We need to advocate for a strong payment system for our hospitals so they can continue to employ people."

mmiller@semissourian.com

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Pertinent address:

1701 Lacy St., Cape Girardeau, MO

211 Saint Francis Dr., Cape Girardeau, MO